/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/001023.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 23, 2000, Vol. 4, No. 207 Headlines AUTOMOTIVE SERVICE: Negotiations Stumble & Push Company into Chapter 11 BIG PARTY: Asks for Extension of Exclusive Period through March 23, 2001 CONTIFINANCIAL CORP: Judge Gonzalez to Consider Disclosure Statement Nov. 8 CONTIMORTGAGE HOME: S&P Lowers Equity Loan Pass-Through Certificate Ratings CREDIT SUISSE: Fitch Affirms Commercial Mortgage Certificate Ratings FAMILY HEALTH: Ventura County Maimed As Largest Health Group Dwindles FILENE'S BASEMENT: Court Confirms Apparel Retailer's Plan of Liquidation FLORU ENTERPRISES: U.S. Trustee to Convene Meeting of Creditors on Nov. 3 FRIENDLY ICE CREAM: Moody's Downgrades $320 Million Debt Securities Ratings GEAC COMPUTER: Canadian Software Firm Sends 500 Workers Home to Cut Costs GENESIS/MULTICARE: MultiCare Sells Only Remaining Ohio Facility GENEVA STEEL: Confirmation Hearing to Commence Thursday Afternoon GLOBAL TISSUE: Court Fixes November 6 Deadline for Filing Proofs of Claim HARNISCHFEGER INDUSTRIES: Beloit Rejects Agreement with Proctor & Gamble HEILIG-MEYERS: Chapter 11 Proceedings Further Delays Second Quarter Results IMPERIAL CREDIT: Moody's Lowers Senior Debt to Caa1 & Says Outlook Negative IMPERIAL HOME: Creditors & Lenders Support Exclusivity Extension to Dec. 18 JIM L. SHETAKIS: Case Summary and 20 Largest Unsecured Creditors LAIDLAW, INC.: Creditors Agrees Transportation Firm To Borrow $275 Million LAMONTS APPAREL: Confirmation Hearing Going Forward on Nov. 6 in Seattle LAROCHE INDUSTRIES: Asks Delaware Court to Set December 22 Claims Bar Date MEDICAL RESOURCES: Disclosure Statement Hearing Adjourned to Nov. 16, 2000 MOBILE ENERGY: Disclosure Statement Draws Fire from Major Creditor NATG HOLDINGS: Fitch Maintains B Rating on 12.75% Senior Subordinated Notes NATIONAL ENERGY: Announces NEGI As New Trading Symbol & CUSIP No. 635812209 O-J TRANSPORT: Court Forces Transportation Firm To File for Bankruptcy ONYOURSIDE.COM: Huge Claims + Lawsuits + Poor Sales = Chapter 11 OWENS-ILLINOIS: Fitch Maintains BBB- Rating on Senior Unsecured Notes OWENS CORNING: U.S. Trustee Appoints Two Official Creditors' Committees OWENS CORNING: Obtains Authority To Pay Pre-Petition Tax Obligations PAGING NETWORK: Metrocall Objects to Extension of Time to File Schedules PRO AIR: General Motors and DaimlerChrysler Added To Secured Creditors List QUORUM HEALTH: Moody's Places Debt Ratings on Review for Possible Downgrade ROBERDS, INC.: Ohio Court Extends Exclusive Period through December 16 SATURN PUB: Case Summary and 18 Largest Unsecured Creditors SERVICE MERCHANDISE: Subleasing Stores To Bed, Bath And Beyond SUNTERRA CORP: PPM Ventures Submits $75M Offer for European Unit TEU HOLDINGS: Creditors' Committee Taps Brown & Wood as Counsel VIDEO UPDATE: Rental Chain Considers Selling Off 119 Retail Stores WASTE MANAGEMENT: Signs Cooperative Research & Development Pact With EPA WEBVAN GROUP: Online Retailer in California In a Financial Squeeze * Bond pricing for the week of October 23, 2000 ********* AUTOMOTIVE SERVICE: Negotiations Stumble & Push Company into Chapter 11 ----------------------------------------------------------------------- Automotive Service Centers Inc., the Sarasota Herald-Tribune reports, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. What pushed the filing was due to its failure to negotiate with Midas Int'l. and Amresco Commercial Finance for an out-of-court restructuring of its existing debts. According to a company statement, in spite of the filing, the Midas stores in Manatee, Sarasota and Charlotte will not cease to operate. Automotive President, Lonnie Orns says that it was also about its low sales that caused the filing. "It became clear that filing under Chapter 11 would allow us to continue to operate and protect the jobs of our 325 employees while we consider a strategic alternative," Orns added. Over 45 years now that the Orns family founded the first Florida Midas in St. Petersburg. Former chairman and CEO, Steve Uiterwyk formed Automotive Service Centers in July of 1998 to consolidate Midas franchise shops. Then, Uiterwyk acquired 63 locations throughout Florida, including 36 shops owned by the Orns. Together with Manatee, Sarasota and Charlotte locations, the chain has stores in Alachua, Broward, Citrus, Clay, Collier, Duval, Hernando, Hillsborough, Lake, Lee, Marion, Palm Beach, Pasco, Pinellas, Polk, St. Johns and St. Lucie counties, as reported by Eileen Kelley of the Herald. BIG PARTY: Asks for Extension of Exclusive Period through March 23, 2001 ------------------------------------------------------------------------ The Big Party Corporation asks for an extension of its exclusive periods to file a plan of reorganization and solicit acceptances thereto. A hearing will be held on the motion before the Honorable Gregory M. Sleet, US District Court Judge, Wilmington, DE on October 20, 2000 at 2:00 PM. The debtor seeks to extend its exclusive periods to file a plan of reorganization for approximately 90 days, through and including January 23, 2001, and extending the debtor's exclusive periods to solicit acceptances to any such plan for approximately ninety days, through and including March 23, 2001. On August 8, 2000, the court approved a comprehensive asset acquisition proposal submitted by a joint venture formed by iParty Retail Store Corp., Hilco Trading Co., Inc. and The Ozer Group, LLC, which provides for iParty to acquire all of the e debtor's assets at 33 retail locations and at the debtor's existing corporate officers and Hilco and Ozer, as joint venturers, shall serve as the debtor's exclusive agent to conduct store closing sales at 21 locations not being acquired by iParty and market the debtor's leaseholds for the Closing Locations are governed by the terms of a designation rights agreement made a part of the Agency Agreement with the debtor retaining a residual interest in the net proceeds of any sales While the debtor has worked hard throughout the first four months of this case, it must now continue plan discussions with the Committee. CONTIFINANCIAL CORP: Judge Gonzalez to Consider Disclosure Statement Nov. 8 --------------------------------------------------------------------------- The hearing to consider approval of the Disclosure statement of Contifinancial Corporation et al. will be held before the Honorable Arthur J. Gonzalez, US Bankruptcy Court, Southern District of New York, on November 8, 2000 at 11:00 AM. October 31, 2000 at 5:00 PM is fixed as the last date for filing written objections or proposed modification s to the Disclosure statement. Dewey BALLANTINE LLP and Togut, Segal & Segal LLP represent the debtors. CONTIMORTGAGE HOME: S&P Lowers Equity Loan Pass-Through Certificate Ratings --------------------------------------------------------------------------- Standard & Poor's lowered its ratings on seven classes of ContiMortgage Home Equity Loan Trust (Conti) home equity loan pass-through certificates from a total of five separate series (see list). The ratings were lowered to reflect distinctly increased risk profiles due to monthly net losses consistently outpacing monthly excess interest production. When monthly net losses consistently exceed monthly excess interest production the resulting erosion of credit support can at times significantly increase the risk of defaulted payment obligations to certificate holders. Over the last quarter, monthly net losses averaged approximately 1.9 times (x) monthly excess interest production in the 11 separate loan groups each backing one or (in the case of series 1997-3, loan group one) two of the certificate classes with lowered ratings. As a result, vercollateralization in the 11 loan groups was reduced to an average of 0.65% of the original collateral balance from an average 0.81%, an average reduction of 16 basis points (bps). Should this overcollateralization erosion rate continue, in some cases overcollateralization could be fully eroded within 10-12 months. By contrast, the average monthly net loss to excess interest ratio is 0.96x for the loan group backing the certificates with raised ratings. The current overcollateralization balance is zero for series 1997-3, loan group one. Consequently, since losses have exceeded excess interest in each month since overcollateralization was fully eroded in July 2000, class B-1F has realized principal reductions due to losses in each of the past three months. Standard & Poor's has determined that it is highly unlikely that class B-1F will recover 100% of the losses allocated to its balance. Further, as the volume of losses allocated to class B-1F grows, the likelihood that class M-2F will have to absorb losses also increases. Should current performance trends continue, Standard & Poor's projects that class M-2F will also have losses allocated to its balance. The 11 loan groups backing classes with lowered ratings have an average total delinquency rate of approximately 25.68%, with approximately 1,369bps of that total delinquency rate identifying serious delinquencies (that is, 90-plus days, foreclosure, and REO). Cumulative realized losses in the 11 loan groups account for an average of approximately 3.13% of their respective initial collateral balances. The entire universe of fixed-rate Conti mortgage pools backing certificates rated by Standard & Poor's have an average total delinquency rate of approximately 16.44%, with approximately 822bps of that total delinquency rate identifying serious delinquencies (that is, 90-plus days, foreclosure, and REO). Cumulative realized losses account for an average of approximately 2.97% of the initial collateral balance. The adjustable-rate universe of Conti mortgage pools backing certificates rated by Standard & Poor's have an average total delinquency rate of approximately 26.37%, with approximately 1,347bps of that total delinquency rate identifying serious delinquencies (that is, 90-plus days, foreclosure, and REO). Cumulative realized losses account for an average of approximately 2.94% of the initial collateral balance. The adjustable-rate Conti pools are generally less seasoned than the fixed-rate pools; Conti's adjustable-rate collateral is only present in Conti pools securitized from 1995 forward. At issuance, the mortgage collateral backing Conti certificates generally consisted of fixed-rate and adjustable-rate subprime home equity loans secured by first or second liens on owner-occupied, single-family detached residential properties. The percentage of the initial pool secured by second liens was generally less than 10%. The fixed-rate Conti pools initially consisted of 15- to 30-year loans, with a 15-year balloon loan component usually accounting for approximately 30%-45% of the pool. The adjustable-rate pools initially consisted of 30-year loans, which in many cases carried a fixed rate for the first two to three years before converting to an adjustable-rate mode. Balloon loans generally were not included in the adjustable Conti rate pools. On May 17, 2000, ContiMortgage Corp. along with 18 of its affiliates filed a petition for relief under Chapter 11 of the United States Bankruptcy Code. Also on May 17, 2000, ContiMortgage Corp. filed a motion with the United States Bankruptcy Court for approval of a sale pursuant to an asset purchase agreement by and between ContiMortgage Corp. and Fairbanks Capital Corp. Subsequently, Fairbanks Capital, a Standard & Poor's approved servicer with a Strong ranking, has acquired ContiMortgage Corp.'s entire subprime servicing portfolio and operations, which includes the servicing rights and obligations related to the collateral-backing certificates addressed above, Standard & Poor's said. OUTSTANDING RATINGS LOWERED ContiMortgage Home Equity Loan Trust Series Class To From ------ ----- -- ---- 1997-3 M-2F BB A- 1997-3 B-1F D CCC 1997-3 B-1A B BB 1997-4 B B BBB- 1997-5 B BB BBB- 1998-1 B B BBB- 1998-2 B BB BBB- CREDIT SUISSE: Fitch Affirms Commercial Mortgage Certificate Ratings -------------------------------------------------------------------- Credit Suisse First Boston Mortgage Securities Corp./DLJ Mortgage Acceptance Corp.'s commercial mortgage pass-through certificates, series 1995- T1, are affirmed by Fitch as follows: the $5.8 million class D at `BB-' and the $11.1 million class E at `B-'. Fitch does not rate the class F certificates. The affirmations follow Fitch's annual review of the transaction, which closed in Feb. 1995. The trust certificates represent the entire ownership interest in a trust fund, whose primary asset is the multifamily mortgage pass-through certificates, series 1994- MF1 class B certificates. The class B multifamily mortgage pass-through certificates provide the credit enhancement for the class A multifamily mortgage pass-through certificates, series 1994-MF1. DLJ Mortgage Acceptance Corp. and CS First Boston Mortgage Securities Corp. were the depositors of 71 mortgage loans to the trust, who issued the class A multifamily mortgage pass-through certificates, series 1994- MF1 and two interest only certificates. Those class A and interest only certificates are the primary assets of the Fannie Mae multifamily REMIC trust 1994-M5. The Federal National Mortgage Association guarantees timely payment of interest and ultimate payment of principal on the guaranteed ACES REMIC pass-through certificates, Fannie Mae multifamily REMIC trust 1994-M5. The class A and class B multifamily mortgage pass-through certificates, series 1994-MF1 were originally collateralized by 71 mortgage loans secured by multifamily properties. Currently, there are 42 loans remaining, as 29 have paid off. Currently, the largest geographic concentrations are in Indiana (19%), Florida (12%) and Nevada (11%). To date, the trust has suffered realized losses totaling $195,232. As of the Sept. 2000 distribution date, the pool's aggregate certificate balance was $141.9 million, showing a 35.9% reduction since closing. There are currently three specially serviced loans, representing 6.5% of the pool. The parent of the borrower on these loans, Grand Court Lifestyles, Inc., filed for bankruptcy in March of 2000. However, the loans remain current. One additional loan (8.0%) is over 30-days delinquent. The Master Servicer, GMAC Commercial Mortgage, received year-end (YE) 1999 financial statements for 39 loans, representing 91% of the outstanding balance. The weighted average debt service coverage ratio (DSCR) for YE 1999, using borrower reported financials, is 1.60 times (x) up from 1.57x as of YE 1998 and 1.36x at origination. Two loans, representing 3.9% of the pool, had YE 1999 DSCR's below 1.0x. Fitch will continue to monitor this transaction, as surveillance is ongoing. FAMILY HEALTH: Ventura County Maimed As Largest Health Group Dwindles --------------------------------------------------------------------- Unable to cope with $6 million in debt, Ventura County's largest medical group will lay off 300 of its employees and will leave 135,000 patients to seek other health insurers, The Times Mirror reports. "It's a very sad day for our patients and for health care in Ventura County overall," said Mari Zag, spokeswoman for the Simi Valley-based Family Health Care Medical Group. Not just patients, but also 200 doctors and 700 specialists are affected. Zag said that what finally pushed the health group overboard was when two large health plans were canceled and two others either failed to remit October payments or underpaid the amount due. The medical group in California operates four clinics and acts as a mediator between a network of physicians and HMO's. The Times added that Family Health's largest contractors were California Care Blue Cross, with about 33,000 patients, and Health Net and PacifiCare, each with more than 20,000 patients. The group had contracts with 16 health plans, including Cigna, Aetna U.S. Healthcare, Blue Shield, Maxicare, and three senior-care programs. FILENE'S BASEMENT: Court Confirms Apparel Retailer's Plan of Liquidation ------------------------------------------------------------------------ According to the docket, the U.S. Bankruptcy Court confirmed Filene's Basement Corp.'s Amended Joint Plan of Liquidation, filed June 16, 2000. The Company's related Disclosure Statement received Court approval of September 5, 2000. Filene's has been operating under Chapter 11 protection since August 23, 1999. (New Generation Research, Inc. 19-Oct-00) FLORU ENTERPRISES: U.S. Trustee to Convene Meeting of Creditors on Nov. 3 ------------------------------------------------------------------------- Floru Enterprises, Inc. filed a Chapter 11 bankruptcy case on September 21, 2000. Schuyler Glenn Carroll & WOLOSKY LLP, New York represents the debtor. A meeting of creditors is set for November 3, 2000 at 2:30 PM, Office of the US Trustee, 80 Broad Street, New York, NY. FRIENDLY ICE CREAM: Moody's Downgrades $320 Million Debt Securities Ratings --------------------------------------------------------------------------- Moody's Investors Service downgraded all ratings of Friendly Ice Cream Corporation. Ratings lowered include the $120 million senior secured bank facility to B2 from B1 and the 10.5% $200 million senior unsecured notes due 2007 to B3 from B2. The senior implied rating fell to B3 from B2 and the issuer rating to B3 from B2. The rating outlook is stable. The ratings downgrade was prompted by expectations that debt protection measures will remain weak over the intermediate term. We anticipate that leverage will decline as debt is paid down with proceeds from the sale of non-productive assets. However, we also believe the company's liquidity position does not allow for unexpected occurrences and that the cushion of bank covenant compliance will be tight. The ratings reflect the intense competition in the family-style segment of the restaurant industry, the company's leveraged financial condition, the company's dependence on a few commodities such as cream and sugar, and the seasonality of the ice-cream business. The ratings also consider the uncertainty surrounding the transformation under way in which the company intends to refranchise or close about 310 of the weak or non core-market stores. However, the ratings consider the company's well established position in the Northeast, the strength of the "Friendly's Ice Cream" brand name, newly designed strategies to hedge spikes in cream prices, and the company's ownership of a considerable portion of its restaurant real estate. The B2 rating on the senior secured bank facility ($55 million revolver facility, $15 million letter of credit facility, and $50 million of unamortized term loans) considers that this debt is secured by substantially all of the company's assets and the shares of subsidiaries. We believe that the collateral provided by ownership of a significant portion of restaurant real estate would provide good coverage in a distressed scenario. The B3 rating on the senior unsecured notes considers that this debt is guaranteed by the company's subsidiaries, but the notes are effectively subordinated to a significant amount of secured debt. However, value of real estate beyond the bank loan should offset loss in a distressed scenario. The stable rating outlook considers our expectation that divestiture of many of the weaker performing stores will stabilize operating income. Through using excess cash to pay down the term loans ahead of schedule, we expect that leverage could begin to improve over the intermediate term. Nevertheless, with approximately $20 million of revolver availability, we believe that the company could face pressure over the next six months in carrying out necessary capital expenditures and making interest payments if the seasonal winter revenue decline is more severe than usual and asset sales are delayed. Friendly's intends to substantially reduce the number of company-operated stores over the next 2 years. 150 of the non-contributing stores are to be closed (100 already closed) and 161 stores will be sold to franchisees. With fewer stores that generate a higher absolute level of cash flow and the use of asset sale proceeds to pay down bank debt, we anticipate that the company can moderately decrease leverage. Friendly's business is concentrated during the summer season for several reasons. First, most Friendly's restaurants are in the northern part of the country where restaurant visits decline during winter months of inclement weather. Second, sale of a disproportionate share of higher-margin ice cream desserts during the summer months intensifies the seasonal effect. Same store sales comparisons for the summer of 2000 were below prior years because of a cool summer in the Northeast and lack of new product introductions. We believe that the company's revolver availability is sufficient to accommodate normal seasonal fluctuations, but the liquidity cushion will not stretch to cover a significant abnormal event. The company paid down debt by $10 million over the first 6 months of the year using proceeds from the sale of restaurants to franchisees. Adjusted debt to EBITDAR modestly decreased to 5.6 times on July 2, 2000 versus 5.8 times on January 2, 2000 as the company incurred costs to close down restaurants and reduce administrative overhead. EBITDA covered interest expense by 1.9 times for the 12 months ending July 2 (compared to 1.9 times for the year ending January 2), while EBITDA just covered both interest expense and capital expenditures. Going forward, we anticipate that the company will continue paying down debt with proceeds from the sale to franchisees of additional restaurants and that adjusted leverage will fall to near 5 times. Friendly Ice Cream Corporation, headquartered in Wilbraham, Massachusetts, owns 486 and franchises 114 Friendly's family-style restaurants and retails ice cream through 3500 supermarkets in the Northeast. GEAC COMPUTER: Canadian Software Firm Sends 500 Workers Home to Cut Costs ------------------------------------------------------------------------- Canada's largest software company, The Globe and Mail reports, currently faces an accounting charge of $28 million for its second quarter and is sending home 500 workers. Geac Computer Corp. Ltd. is also up for grabs for anyone to purchase. "We looked at this business by business because some of our businesses have a real future to them," William Nelson, Geac's chairman and interim chief executive officer, said during a conference call. "We want to nurture them. Some of our businesses, we're milking them anyhow, and since they're not getting anywhere, we might as well milk even more. And a couple we probably should shoot - gracefully of course." Third quarter results will improve due to the restructuring and boost of software sales, according to John Caldwell, interim president and chief operating officer. "With the steps we've taken, we're confident that we'll restore the company's profitability, enhance competitiveness, and adjust our business to the realities of the markets we face," Mr. Caldwell added. The layoffs consist mainly in executive positions and professional services experts from JBA Holdings PLC, acquired by Geac in September, 1999. Geac plans to finish the layoffs next month. The $8 million charge the company faces is due to the lawsuit at JBA during the second quarter. CEO Douglas Bergeron left the Toronto-based Geac, due to its ground deep stock price grazed by its distressed financial state. Geac sells enterprise resource planning tools that help firms integrate planning, marketing and human resources files. GENESIS/MULTICARE: MultiCare Sells Only Remaining Ohio Facility --------------------------------------------------------------- Prior its Chapter 11 petition date and as part of its business strategy to focus on concentrated geographic areas and reduce debt obligations to prepetition secured lenders, The MultiCare Companies, Inc., made a deal to sell all of its Ohio Facilities to Trans Healthcare pursuant to an Asset Purchase Agreement, dated May 12, 2000 with a subsidiary of Trans Healtheare, Inc. The sale of all the Ohio Facilities was consummated by the Closing Date of June 1, 2000, except for the Holgate Facility located at 600 Brown Avenue in Holgate, Ohio. Pursuant to the First Addendum to Asset Purchase Agreement, dated May 31, 2000, the parties agreed that the closing on the sale of the Holgate Facility would occur on a later date in view of certain unfavorable consequences under relevant state law if the Debtors terminated all of their operations within Ohio at one time. At the time of the closing of the Asset Purchase Agreement, the parties contemplated that the Holgate Facility would he transferred to Trans Healthcare by August 31, 2000. In connection with the Addendum, the Debtors also entered into a Management Agreement, dated June 1, 2000, pursuant to which, among other things, Trans Healthcare assumed management responsibility for the Holgate Facility in exchange for a management fee equal to the facility's net earnings before interest, depreciation, taxes and amortization during the period of Trans Healthcare's management of the Holgate Facility. Essentially, under the Management Agreement, Trans Healthcare is to incur all costs associated with the operation of Holgate, and is to receive all of its benefits in exchange. The Debtors received approximately $36.5 million in net proceeds upon consummation of the Asset Purchase Agreement. The Debtors used approximately $33 million of these proceeds to pay down their obligations under their prepetition secured working capital facility. The balance of the proceeds were used to fund certain escrows and other closing obligations. With the lion's share of the transactions contemplated and having effectively ceased their Ohio operations, the Debtors believe they are in no position to operate the Holgate Facility at any level of efficiency. In fact, "the retention of ownership and management control by the Debtors' of a single facility located outside the Debtors' areas of operation would be foolish," the Debtors tell the Judge. The Debtors believe that the Holgate Purchase Price of $146,570 as defined in the Addendum is fair and reasonable, and was agreed upon by both parties. The Agreements were each negotiated in good-faith, and at arm's length. Trans Healthcare is unaffiliated with any of the Debtors, the Genesis Debtors, or any of their respective officers, directors, or subsidiaries. By this Motion, the Debtors sought and obtained the Court's authority to consummate the Holgate Facility sale, free and clear of any and all liens, encumbrances or interests, by: (a) assuming, and assigning to Trans Healthcare, the Lease, pursuant to section 365(a) and (b) of the Bankruptcy Code; and (b) transferring the other assets at the Holgate Facility to Trans Healthcare and paying Trans Healtheare's outstanding management fees, pursuant to section 363(b)(1) of the Bankruptcy Code. (Genesis/Multicare Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) GENEVA STEEL: Confirmation Hearing to Commence Thursday Afternoon ----------------------------------------------------------------- A hearing to consider confirmation of the First Amended Plan of Reorganization jointly proposed by the debtor and the Official Committee of Bondholders has been continued to October 26, 2000 at 2:30 PM, before the Honorable Glen E. Clark, US Bankruptcy Court, District of Utah. If necessary, the hearing will be continued on October 27, 2000. GLOBAL TISSUE: Court Fixes November 6 Deadline for Filing Proofs of Claim ------------------------------------------------------------------------- Pursuant to an order of the US Bankruptcy Court, District of Delaware, dated September 28, 2000, all creditors of the debtor, Global Tissue LLC, holding claims of any kind against the debtor that arose on or before the Petition Date are required to file a proof of claim on or before 4:00 PM on November 6, 2000. HARNISCHFEGER INDUSTRIES: Beloit Rejects Agreement with Proctor & Gamble ------------------------------------------------------------------------ Beloit and Proctor & Gable Paper Products Company are parties to a 1998 Lease Agreement under which: (a) P&G financed the cost of certain non-exclusive paper making machinery and equipment for Beloit's Pilot Testing Facility in Rockton, Illinois; (b) P&G leased to Beloit for installation at the Facility certain exclusive paper-making machinery and equipment; and (c) Beliit agreed to make the Facility and Equipment available to P&G for up to 50 days per year for P&G's own research and development work. At the end of the 10-year term, Beloit was supposed to buy all of the equipment from P&G. Because Beloit has sold almost everything it owned to Valmet, that won't happen. Accordingly, by this Motion, Beloit sought and obtained an order, pursuant to 11 U.S.C. Sec. 365, authorizing it to reject the Lease Agreement. (Harnischfeger Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 609/392-0900) HEILIG-MEYERS: Chapter 11 Proceedings Further Delays Second Quarter Results --------------------------------------------------------------------------- According to its recent SEC filing, Heilig-Meyers Co. expects its operating results to dive by a significant margin, Dow Jones reports. The Richmond- based furniture retailer states that due to its Chapter 11 filing, it can't come up with a correct estimate for its second quarter results. Due to its recent closure of 302 stores and its new in-house installment credit program, it further complicates to derive a reasonable estimate. Heilig-Meyers filed for bankruptcy protection under Chapter 11 on Aug. 16 in Richmond. The retailer posted assets of $1.35 billion and debts of $836.3 million as of May 31. IMPERIAL CREDIT: Moody's Lowers Senior Debt to Caa1 & Says Outlook Negative --------------------------------------------------------------------------- Moody's Investors Service downgraded the credit ratings of Imperial Credit Industries, Inc. (senior debt to Caa1 from B3). The ratings outlook remains negative. The primary reasons for the downgrade are the decline in the company's cash flow from operations and the deterioration in its asset quality. Imperial Credit has substantially narrowed its business focus by exiting various businesses, Moody's said. In a major strategic change, the company recently decided to wind down its leasing group, which in Moody's opinion has been one of its two main profit centers. According to the rating agency, ICII's principal profit center going forward will be Coast Business Credit, its middle-market commercial lending operation. These steps have been prudent actions to improve the company's profitability and asset quality, Moody's said. However, these actions show that ICII has not been able to achieve sufficient scale and earnings power in various businesses that it had targeted. ICII will be a smaller enterprise going forward, and its cash flow from operations will most likely be reduced. Asset quality has deteriorated in the commercial lending businesses, according to Moody's. In August 2000 Coast increased its loan loss reserves substantially, relative to its size, under pressure from state and federal banking regulators. Management has hired new credit officers and risk management officers to address the problems, which is commendable. However, in view of the issues concerning Coast's previous credit and reserving practices, it is possible that additional nonperformers could arise, the rating agency added. Asset sales generate a substantial component of cash flow. In particular, the acquisition of the Imperial Credit Commercial Mortgage Investment Corp., a REIT, has been a major source of cash flow, as ICII liquidates the REIT's assets. The company's ability to complete on a timely basis the asset sales that it contemplates will be an important factor in Moody's evaluation of the company's creditworthiness in the future. The negative outlook reflects the uncertainty regarding the company's profitabilty and asset quality in the future. The following ratings are affected: Imperial Credit Industries, Inc. a) senior debt to Caa1 from B3; b) preferred stock rating to "caa" from "b3". Imperial Credit Industries, Inc., headquartered in Torrance, California, had shareholders' equity of $165 million as of June 30, 2000. For the six months ending June 30, 2000, the company reported a loss of $35 million. IMPERIAL HOME: Creditors & Lenders Support Exclusivity Extension to Dec. 18 --------------------------------------------------------------------------- The Imperial Home Decor Group Inc. said that its bank lenders and the Official Committee of Unsecured Creditors in the company's chapter 11 case have indicated their support for the company's request to extend the period in which IHDG has the exclusive right to file and advance a plan of reorganization in its chapter 11 case. IHDG filed an application with the United States Bankruptcy Court for the District of Delaware to extend exclusivity on October 10, 2000. A hearing to consider the application is scheduled for October 26, 2000. Douglas R. Kelly, president and chief executive officer of IHDG, said that the company and its creditors are continuing discussions and are focused on developing a stand-alone plan of reorganization. "After careful consideration of all of our options, the company and its principal creditor constituencies have concluded that a potential sale of the company to a third party -- as noted in our application for an extension of exclusivity -- is not in anyone's best interest. Instead, all parties agree that IHDG should emerge on a stand-alone basis," said Kelly. "The sole remaining issue under discussion involves limited aspects of the anticipated capital structure of the company upon emergence from chapter 11. We remain confident that this issue can be resolved in the near future." Kelly said the company remained committed to formulating and filing a reorganization plan and emerging from chapter 11 as quickly as possible. Upon extension of its exclusivity period, the company would be granted another 60 days, until December 18, 2000, in which only it may file a plan of reorganization, and another 60 days after that date, until February 16, 2001, during which only it can solicit creditors to vote for a plan of reorganization. Imperial Home Decor Group is the world's largest designer, manufacturer and distributor of residential wallcovering products. IHDG also markets commercial wallcoverings and is a premiere supplier of pool liners through the Vernon Plastics operating division. Headquartered in Cleveland, Ohio, IHDG supplies home centers, national chains, independent dealers, mass merchants, design showrooms and specialty shops. Product lines include the Imperial, Katzenbach & Warren, Albert Van Luit, Sterling Prints, Imperial Fine Interiors, Sunworthy and Colorfields by Sunworthy brand names. The Company was created in 1998 through the merger of Imperial Wallcoverings and Borden Decorative Products. In 1999, Imperial Home Decor Group had net sales of $411.7 million. JIM L. SHETAKIS: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Jim L. Shetakis Distributing Co. 3400 Western Avenue Las Vegas, NV 89109 Chapter 11 Petition Date: October 18, 2000 Court: District of Nevada Bankruptcy Case No.: 00-17939 Judge: Linda B. Riegle Debtor's Counsel: Timothy S. Cory, Esq. Timothy S. Cory & Associates 3016 West Charleston Blvd. Suite 210 Las Vegas, NV 89102 Total Assets: $ 1 Million Above Total Debts : $ 1 Million Above 20 Largest Unsecured Creditors: H&J Trading Co. $ 122,553 Pacific Choice Brands $ 99,743 Costa Macaroni MFG. Co. $ 98,287 Ventura Foods, LLC $ 62,084 Dot Foods, Inc. $ 51,217 Nabisco, Inc. $ 42,207 Heinz Service Company $ 35,762 Premier Foodservice $ 39,852 American Roland Food Corp $ 35,177 Portion Pac, Inc. $ 33,524 Penske Trust Leasing Co. $ 32,397 Vie De France Yamazaki $ 29,944 Papercraft Los Angeles $ 29,559 Giulianos Speciality Foods $ 28,241 Rod's Food Products $ 27,653 Roger A. Brown & Company $ 26,773 Windsor Food Grouop $ 25,598 General Mills, Inc. $ 25,548 Premier Foodservice $ 24,537 Pactiv (Tenneco Pkg) $ 24,261 LAIDLAW, INC.: Creditors Agrees Transportation Firm To Borrow $275 Million -------------------------------------------------------------------------- According to the National Post Online, Laidlaw, Inc., got approval from its creditors to borrow $275 million to keep maintain the transportation company's liquidity. "Based on our preliminary tally, we believe we will receive the required consents from our bondholders to finalize both of the financing arrangements," said Stephen Cooper, Laidlaw vice-chairman and chief restructuring officer. "These facilities are designed to meet Laidlaw's operating companies' immediate working capital needs. With these facilities in place, we would be able to focus on resolving Laidlaw's long- term capital structure and liquidity issues." LAMONTS APPAREL: Confirmation Hearing Going Forward on Nov. 6 in Seattle ------------------------------------------------------------------------ Lamonts Apparel, Inc. filed a Chapter 11 plan and Dislcosure Statement. The court entered an order on September 18, 2000 approving the adequacy of the Disclosure Statement. The hearing to consider Confirmation of the plan shall be held on November 6, 2000 at 11:00 AM before the Honorable Thomas T. Glover, US Bankruptcy Court, Western District of Washington, Seattle. The plan provides for the liquidation of all of the debtor's assets and the distribution of the proceeds to holders of allowed claims in cash. The debtor employed The Buxbaum Group as its reorganization consultant. The Buxbaum Group is to receive as compensation a percentage of the distribution to be made to general unsecured creditors. The debtor estimates that the payment to The Buxbaum Group will be approximately $650,000. Class 4 - unsecured claims, are impaired under the plan. The debtor estimates that the aggregate outstanding amount of allowed claims in Class 4 as of the Effective Date, will be in the range of $33.3 million to $43.2 million. On or about May 16, 2000, the Bankruptcy Court entered its order approving the sale of the debtor's real estate assets to Gottschalks for a purchase price equal to $21.8 million in cash and the assumption of certain liabilities. The real estate assets sale closed on July 24, 2000. Inventory liquidation sales of the debtor's inventory generated approximately $36.4 million Lamonts shall be dissolved as of the Effective Date and wound up as soon as feasible after the Final Decree Date. LAROCHE INDUSTRIES: Asks Delaware Court to Set December 22 Claims Bar Date -------------------------------------------------------------------------- LaRoche Industries Inc. and LaRoche Fortier Inc. seek a court order setting a date to file proofs of claim. Al creditors of the debtors are required to file a proof of claim on or before 4:00 PM on December 22, 2000. Alston & Bird LLP, Atlanta, GA. and Young, Conaway Stargatt & TAYLOR LLP, Wilmington, DE represent the debtors. MEDICAL RESOURCES: Disclosure Statement Hearing Adjourned to Nov. 16, 2000 -------------------------------------------------------------------------- The U.S. Bankruptcy Court adjourned until November 16, 2000 a hearing to consider approving the adequacy of Medical Resources, Inc.'s Disclosure Statement related to its Second Amended Joint Plan of Reorganization, dated July 10, 2000. The Company has been operating under Chapter 11 protection since April 7, 2000.(New Generation Research, Inc., 19-Oct-00) MOBILE ENERGY: Disclosure Statement Draws Fire from Major Creditor ------------------------------------------------------------------ Creditor S.D. Warren Company objects to the Disclosure Statement accompanying the first amended joint plan of reorganization proposed by Mobile Energy Services Company, LLC and Mobile Energy Service Holdings, Inc. and a steering committee for an ad hoc committee formed by certain bondholders of the debtors. S.D. Warren complains that the Disclosure Statement fails to address, classify or propose the treatment for S. D. Warren, a major creditor in the proceeding. The debtors intend to assume several contracts to which SD Warren is party, but also indicates that they intend to pursue a plan that violates or modifies those same agreements, making them unassumable, thus undermining critical economic components of the very plan they seek to propose. The Disclosure Statement fails to adequately disclose the numerous material risks that are inherent in the plan that either individually, and most assuredly make the plan unconfirmable. The creditor finally states that the Disclosure Statement contains a large number of inconsistencies and ambiguities that render the Disclosure statement defective and reflects an effort that falls far short of the standard required for court approval. NATG HOLDINGS: Fitch Maintains B Rating on 12.75% Senior Subordinated Notes --------------------------------------------------------------------------- Fitch has re-assigned a rating to NATG Holdings, LLC's (NATG) $150 million 12.75% senior subordinated notes due 2010 of `B'. In providing the rating, Fitch considered historical and prospective financial results, management strategy, and industry conditions. The existing `B+' rating on the notes, which was pro-forma for, and contingent upon, a $150 million initial public offering (IPO) of Orius Corp. common shares, has been withdrawn because the IPO has been indefinitely postponed as a result of current market conditions. The `BB-' rating on the proposed $285 million credit facilities (facilities) has also been withdrawn because the consummation of the IPO was a condition precedent to the closing of the facilities, and the facilities' rating was also contingent upon and pro-forma for the closing of the IPO. The Rating Outlook is Stable. NATG is organized as a direct, wholly owned subsidiary of Orius Corp. (Orius or the Company), a holding company founded in 1997 to develop a national presence in the telecommunications and broadband network infrastructure services sector. Since formation, Orius has grown rapidly via 18 acquisitions and internal growth. In Dec. 1999, Willis Stein & Partners, management and co-investors purchased Orius in a leveraged buy-out. As of 6/30/00, NATG had total debt outstanding of approximately $443.3 million and debt/EBITDA of 3.5 times (x), (debt excludes $150.7 million of junior subordinated notes issued by Orius that are pay in kind until 2001 and 40% cash pay starting in 2001). Pro-forma interest coverage for the last twelve months ended 6/30/00 was 2.5x. Orius is a national provider of network infrastructure services. Services include the design, engineering, deployment and maintenance of `internal' and `external' networks. In the latest twelve months ended June 30, 2000, internal and external services represented 41% and 59%, respectively, of $705.6 million in total revenues. Internal services primarily consist of work performed within the central offices of telecom providers such as re- wiring to co-locate competitive local exchange carrier (CLEC) equipment for the regional bell operating companies (RBOCs), installation of digital subscriber lines and daily maintenance and upgrades of systems. Orius believes it is the largest independent provider of central office services in the U.S. The internal services segment also includes interior wiring services for commercial and governmental customers that are known as integrated premise services. External services are provided outside the customer's premise and encompass the design, engineering, deployment and maintenance of fiber optic, coaxial, and copper networks as well as internet infrastructure. NATIONAL ENERGY: Announces NEGI As New Trading Symbol & CUSIP No. 635812209 --------------------------------------------------------------------------- National Energy Group, Inc. (OTC Bulletin Board: NEGI) announces a new trading symbol and CUSIP number for its common stock. Effective immediately, the Company's common stock will be traded using the trading symbol NEGI and CUSIP number 635812209. Trading of the Company's common stock under its former symbol, NEGXQ, has been discontinued. The new symbol applies to trading of the Company's recently authorized common stock pursuant to its Joint Plan of Reorganization (the "Plan") as confirmed by the United States Bankruptcy Court for the Northern District of Texas, Dallas Division and effective as of August 4, 2000 (the "Effective Date"). Pursuant to the terms of the Plan, each common stock shareholder of record as of the Effective Date shall retain his/her interest; provided that all common stock certificates of the Company shall be deemed cancelled and exchanged by the Transfer Agent for newly issued shares of common stock in the reorganized Company which shall be issued to common stock shareholders at a ratio of one (1) share of common stock in the reorganized Company for every seven (7) shares cancelled as a result of the reorganization. The Plan further provides that Arnos Corp. (an affiliate of the Company) will pay an amount of at least $2.0 million to the reorganized Company to purchase additionally issued shares of common stock such that its ownership interest in the reorganized Company shall be up to 49.9% of the value of all issued outstanding stock of the reorganized Company. The Company's Transfer Agent, Wells Fargo Bank Minnesota, NA, has effected the reverse split and will commence today the mailing of new certificates to the Company's common stock shareholders of record as of the Effective Date representing their post-bankruptcy common equity interest in the reorganized Company. Upon receipt of the new certificates, each shareholder is requested to surrender their old certificates to the Transfer Agent. The new certificates are being issued pursuant to a registration exemption under Section 1145 of the United States Bankruptcy Code and will include a restrictive legend mandated by the Plan which prohibits transactions in the Company's common stock by anyone who is or will become a "5 percent shareholder" within the meaning of Section 382 of the Internal Revenue Code. Included with the new certificates to be delivered by the Transfer Agent is a letter from Mr. Bob G. Alexander, President and Chief Executive Officer of the reorganized Company, stating that with the implementation of the Plan, the Company intends to concentrate its efforts on profitability with the intent of maximizing shareholder value. The foregoing is presented for summary purposes only and reference is made to the Company's Joint Plan of Reorganization and applicable Bankruptcy Court orders for the complete details of the transactions described above. National Energy Group, Inc. is a Dallas, Texas based independent oil and gas exploration and production company. The Company's principal properties are located onshore in Texas, Louisiana, Oklahoma and Arkansas. O-J TRANSPORT: Court Forces Transportation Firm To File for Bankruptcy ---------------------------------------------------------------------- After losing a recent trial in the U.S. District Court in Chicago, O-J Transport Co., filed for bankruptcy protection under Chapter 11. Crain's Detroit Business reports. Detroit-based O-J was accused of returning leased truck trailers in poor condition, and was ordered to pay damages. O-J attorney, Stephen Gross says that the bankruptcy filing on Oct. 3 was due to the judgment. Gross further added, O-J lost money the past two years, the bankruptcy filing wasn't needed then, except now for the $1.5 million judgment. President Louis James refused to comment when Crain's reporters called. ONYOURSIDE.COM: Huge Claims + Lawsuits + Poor Sales = Chapter 11 ---------------------------------------------------------------- Facing claims of $214 million and a chain of class action suits, OnYourSide.com Inc., filed for bankruptcy protection under Chapter 11, The Times Union relates. After its IPO in August, its shares soared from $10 to over $91, giving the company a $1.4 billion market cap. Investors were outraged when, with no warning, the shares slumped to a measly $0.73 in June. Some 2,750 individual and institutional investors have joined class action suits pending around the globe. Attorneys of the upstart Web site confirmed that the company ceased operations after assets were liquidated by Grand Wada Bank of Kuala Lumpur, Malaysia. Chairman Reuben Norvel told reporters that the incapacity of a young firm to respond rapidly to demands caused the company's blunder. "We had great hopes for OnYourSide.com," Norvel added. "The time seemed right for a company that spoke up for consumers, while delivering potent return to investors. Things just didn't work out." OWENS-ILLINOIS: Fitch Maintains BBB- Rating on Senior Unsecured Notes --------------------------------------------------------------------- Fitch has maintained its ratings on Owens-Illinois' (NYSE: OI) senior unsecured notes and convertible preferred stock following the company's announcement that it will be taking $798 million in pre-tax charges for restructuring and capacity realignment as well as to reserve for future asbestos liabilities. Fitch rates O-I's senior unsecured notes `BBB-` and its convertible preferred stock `BB'. The Outlook remains Negative. The negative outlook reflects Fitch's concern regarding the company's refinancing risk in light of currently unfavorable market conditions, O-I's imbalance of fixed and floating rate debt, and the increased cost of debt due to higher interest rates on elevated debt levels. Fitch expects O-I to convert a meaningful portion of floating rate debt into fixed rate debt, stagger future debt maturities and successfully refinance its existing bank credit agreement in order to maintain the current rating. In addition, debt must be reduced to levels more appropriate for the rating category through the divestiture of non-core assets and improved operating cash flow. Alternatively, unsuccessful efforts at obtaining favorable refinancing terms or an increase in leverage due to share repurchases could lead to a ratings downgrade. Following a review of its current and potential asbestos liabilities, O-I has increased its asbestos reserve. While current liabilities appear to be manageable, Fitch's concern is heightened by the recent bankruptcy filing of a major asbestos defendant. While Fitch had expected continuing cash outflows related to asbestos, future expenditures were expected to decline. As operating cash flow is directed toward asbestos payments, the time at which additional free cash flow is available for debt reduction is postponed. Positively, O-I continues to see improved glass container market conditions during the third quarter in certain of its key growth areas. In particular, South America has shown improved sales and operating income while operations in Central Europe appeared to be stabilizing. In addition, the company's plastic packaging segment posted solid unit shipments and operating income in its custom PET, closure and prescription container businesses. However, due to unfavorable macroeconomic conditions such as higher energy costs, unfavorable currency translation and interest rates, O-I was unable to translate improved conditions into more favorable bottom line results. However, as a result of the announced restructuring and realignment program, the company expects a reduction in fixed costs and improved manufacturing capacity utilization, yielding $50 million in annual savings. OWENS CORNING: U.S. Trustee Appoints Two Official Creditors' Committees ----------------------------------------------------------------------- Patricia A. Staiano, the United States Trustee for Region III, joined by staff attorneys Frank Perch, Esq., Frederic J. Baker, Esq., Maria Ginerrakas, Esq., Roberta DiAngelos, Esq., and Mark Kenny, Esq., convened a meeting of Owens Corning's largest creditors for the purpose of forming one or more official committees of unsecured creditors in the Debtors' chapter 11 cases. Mr. Perch welcomed creditors and their professionals, cautioning those in attendance that this meeting is not a meeting of creditors convened pursuant to 11 U.S.C. Sec. 341(a). That meeting--at which a representative of the Debtors will appear to be examined under oath--will be held on December 1, 2000, after the Debtors file their Schedules of Assets and Liabilities and creditors have an opportunity to digest that material. Mr. Perch noted that Section 1102 of the Bankruptcy Code directs that committees should "ordinarily" be composed of the seven largest creditors willing to serve. Mr. Perch reminded creditors that the U.S. Trustee for Region III interprets this as a guideline, which it is inclined to follow, but not a mandate. Mr. Perch introduced creditors to the Debtors' lead attorneys from Skadden, Arps, Slate, Meagher & Flom: David S. Kurtz, Esq., in Chicago; Peter J. Neckles, Esq., in New York; and Mark S. Chehi, Esq., in Wilmington. Mr. Kurtz, in turn, introduced creditors to Steven J. Strobel, the Debtors' Vice President and Treasurer and Norman L. Pernick, Esq., of Saul Ewing, LLP, serving as co-counsel to the Company. Mr. Kurtz reviewed the circumstances that gave rise to the filing of the Debtors' chapter 11 cases and reminded creditors that (a) Owens Corning is a leader in the product lines is manufactures, (b) employs 20,000 workers, (c) operates worldwide and (d) has a fundamentally sound business. The goal of these chapter 11 cases, Mr. Kurtz said, is to resolve the asbestos claims under a plan of reorganization that can be confirmed in as short a period of time as possible. Mr. Kurtz stressed that the Company wants to have an open and cooperative relationship with the official creditors' committees. With that in mind, Mr. Kurtz indicated that he, his colleagues and Mr. Stroebel will (i) make themselves available throughout the weekend to meet with committee members and their professionals and (ii) provide each committee member with their home telephone numbers. Addressing issues concerning the company's liquidity, Mr. Kurtz indicated that operating cash flow provides ample funding for the company's working capital needs at this time. The Company has obtained a commitment from Bank of America for a $500,000,000 debtor-in-possession financing facility, but there is no emergency need for that financing at this juncture. Mr. Kurtz reviewed for creditors the relief granted by Judge Walrath at the First Day Hearing, referring to the motions and orders as routine. Mr. Kurtz advised creditors that the Company is still in the process of determining which creditors qualify as Critical Vendors and will share in the $90,000,000 pot available to pay Critical Vendors' prepetition claims. "Who should creditors call to inquire about the Critical Vendor Program," Karen C. Bifferato, Esq., of Connolly Bove Lodge & Hutz LLP, representing Exxon, queried? "Call me," Mr. Chehi volunteered. "My office number is 302-651-3000, and I'll direct you to the appropriate person at Owens Corning." Ms. Staiano indicated that her office was lobbied for formation of multiple creditors' committees in these chapter 11 cases. Recommendations for multiple committees generally fell along the lines of (i) segregating commercial creditors of tort claimants and (ii) segregating Owens Corning creditors from Fibreboard creditors. Following a recess to allow Ms. Staiano and her entourage to sort and sift through the hundreds of statements of willingness to serve on an official committee submitted to the office of United States Trustee since the commencement of the Debtors' chapter 11 cases, Mr. Perch announced that the United States Trustee has concluded that it is appropriate to appoint two official committees of unsecured creditors in the Debtors' chapter 11 cases: (A) a General Unsecured Creditors' Committee; and (B) an Asbestos Creditors' Committee. Mr. Perch announced that the General Unsecured Creditors' Committee will have nine seats, and these creditors are appointed to fill those nine seats to represent the various constituencies in the Debtors' capital structure: -- Bank Lenders * Barclays Bank PLC * Credit Suisse First Boston * Chase Manhattan Bank * Fleet National Bank -- Bondholders * Metropolitan Life Insurance Company * John Hancock Life Insurance Company * Jackson National Life Insurance Company -- Trade Creditors * Minnesota Mining & Mfg. Co. (3M) * Enron Energy Operations, Inc. Mr. Perch thanked all creditors and their representatives for attending this organizational meeting and for their willingness to serve on an official committee. Mr. Perch directed the committee appointees to immediately convene their first meeting, introduce themselves to one another, select a chairperson, decide how to conduct their business and, if they wished, select professionals to advise and assist them in carrying out their statutory duties. Mr. Kurtz indicated that the Debtors would appreciate the opportunity to meet with the Creditors' Committee as quickly as possible in order to provide them with information packages, obtain their consent to confidentiality agreements that will allow the Company to pass material non-public information to the Committee, and to discuss the Debtors' plans to bring these cases to a prompt resolution. The Asbestos Creditors' Committee will be appointed in short order and the U.S. Trustee will publish notice of her appointments to that committee, Mr. Perch advised, drawing the organizational meeting to a close. OWENS CORNING: Obtains Authority To Pay Pre-Petition Tax Obligations -------------------------------------------------------------------- Owens Corning owes various Taxing Authorities for prepetition Sales and Use Tax obligations. Pursuant to 11 U.S.C. Sec. 507(a)(8), these claims are entitled to priority over many other claims against the Debtors' estates. To confirm a plan of reorganization, 11 U.S.C. Sec. 1129(a)(9)(C) requires full payment of these Tax Claims. Not paying these Tax Claims would lead to the Taxing Authorities taking aggressive collection action, the Debtors believe, and withholding of the payment of the Taxes likely would cause taxing authorities to take precipitous action, including a marked increase in state audits and a flurry of lien filings or lift stay motions. Prompt and regular payment of the Taxes will avoid this unnecessary governmental action. Accordingly, by this Motion, the Debtors sought and obtained Judge Walrath's permission, in their sole discretion, to pay any prepetition tax claim, without prejudice to their right to contest the amount of tax owed to any particular Taxing Authority. The Debtors do not provide any estimates of their pre-petition liabilities on account of Tax-Related Claims. (Owens-Corning Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) PAGING NETWORK: Metrocall Objects to Extension of Time to File Schedules ------------------------------------------------------------------------ Metrocall, Inc. objects to PageNet's motion for an order further extending the debtors' time to file schedules and statements and permanently waiving the requirement to file schedules and statements. Metrocall states that the information contained in the schedules of assets and liabilities is necessary to any determination by the court as to the confirmability of the proposed plan of reorganization and is not otherwise set forth in the Disclosure Agreement. Therefore, Metrocall asks that the relief requested by PageNet should be denied and Page Net should be required immediately to file and serve its Schedules and Statements . PRO AIR: General Motors and DaimlerChrysler Added To Secured Creditors List --------------------------------------------------------------------------- Two new names are now added to the secured creditors list of Pro Air Inc.'s Chapter 11 filing, The Detroit News reports. General Motors and DaimlerChrysler loaned the airline $ 7 million in January prior to the filing, and hasn't received any dime for payment. The airline filed for bankruptcy reorganization two days after FAA grounded it. Pro Air filed for Chapter 11 in Western District of Washington. Honorable Judge Karen A. Overstreet is handling the case. QUORUM HEALTH: Moody's Places Debt Ratings on Review for Possible Downgrade --------------------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Triad Hospitals Holdings, Inc. under review for possible upgrade and the debt ratings of Quorum Health Group, Inc. under review for possible downgrade following the announcement that Triad Hospitals has reached an agreement to acquire Quorum Health Group. Ratings on review for possible upgrade: * Triad Hospitals Holdings, Inc.: a) $390 million Senior Secured Debt, currently rated B1 b) Senior Subordinated Notes, due 2009, currently rated B3 c) Senior Implied Issuer Rating, currently rated B1 d) Senior Unsecured Issuer Rating, currently rated B2 Ratings on review for possible downgrade: * Quorum Health Group, Inc.: a) $850 million Revolving Credit Facility, due 2002, currently rated Ba1 b) $150 million Senior Subordinated Notes, due 2005, currently rated Ba3 c) Senior Implied Issuer Rating, currently rated Ba1 d) Senior Unsecured Issuer Rating, currently rated Ba2 Moody's notes that the proposed transaction will create the third largest hospital management company in the U.S. The Quorum assets will complement Triad's mid-market operating strategy while the combined company will benefit from increased geographic diversification. Moody's will review the structure and financial impact of the acquisition, including the combined company's opportunity for margin and cash flow improvement, management's plan for reducing debt and its longer-term strategy for growth. Triad Hospitals, Inc., based in Dallas, TX, owns and operates 31 acute care hospitals and 14 ambulatory surgery centers primarily in small and mid- sized cities throughout the South and Southwestern United States. Quorum Health Group, Inc., based in Brentwood, TN, owns and operates 22 hospitals and manages 212 hospitals primarily in small and mid-sized cities throughout the Southeast and Midwestern United States. ROBERDS, INC.: Ohio Court Extends Exclusive Period through December 16 ---------------------------------------------------------------------- The US Bankruptcy Court, Southern District of Ohio, Western Division, entered an order on September 13, 2000, extends the period in which the debtor has the exclusive right to file a plan of reorganization is hereby extended through December 16, 2000 and the period in which the debtor has the exclusive right to solicit acceptances of a plan of reorganization is hereby extended through February 14, 2001. SATURN PUB: Case Summary and 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Saturn Pub Corporation 246 Route 303 Tappan, New York 10983-2121 Type of Business: Tappan Z Steak & Grill Restaurant Chapter 11 Petition Date: October 18, 2000 Court: Southern District of New York Bankruptcy Case No.: 00-14863 Judge: Adlai S. Hardin Jr. Debtor's Counsel: Raymond Aab, Esq. 120 Broadway 29th Floor New York, New York 10271 (917) 551-1346 Total Assets: $ 1,315,000 Total Debts : $ 1,300,322 18 Largest Unsecured Creditors: Christopher Cartaramo $ 120,000 NYS Dept. of Taxation and Finance $ 60,076 Eleftherios Teizidas $ 50,000 Melvin Steier & Co. CPA $ 50,000 CMG Vending Enterprises, Inc. $ 45,163 Hyland & Robinson In $ 35,222 L & M Construction $ 26,200 Orange & Rockland Utilities $ 14,612 AA Foods Inc. $ 13,763 A & J Tantillo Inc. $ 12,807 Sysco Food Svcs. $ 11,829 Equifax Check Services, Inc. $ 11,194 Earl Everett Ferguson Architect $ 10,345 Eagle Construction $ 7,500 Consumer Carting Corp. $ 5,283 Fire & Ice Heating & Cooling $ 5,000 Internal Revenue Service $ 5,000 Zemo Leasing Corp. $ 4,708 SERVICE MERCHANDISE: Subleasing Stores To Bed, Bath And Beyond -------------------------------------------------------------- In continuance of their 2000 Business Plan, which involves changed merchandise mix and the subleasing of stores, Service Merchandise and its debtor-affiliates sought and obtained the Court's authority to enter into agreements to sublease to Bed, Bath & Beyond 31,675 square feet of space at their Store Number 72 located at Evansville, Indiana and 25,918 square feet of space at Store Number 229 located at Salem, New Hampshire. The Debtors expect that rental revenue under the Subleases for the initial term will exceed $269,000 per year for Store Number 72 and $272,000 per year for Store Number 229. Bed, Bath & Beyond intends to use the subleased space as domestic merchandise stores, and will assume possession of the premises on or before November 15, 2000. The Debtors advise that Bed, Bath & Beyond is the leading domestics retailer, with approximately 240 stores located throughout the United States selling better-quality domestic items such as bed linens, bath accessories, kitchen items and home furnishings. Over the last two years, Bed, Bath & Beyond has experienced substantial revenue growth of nearly 35 percent from $1,400,000,000 in 1998 to $1,900,000,000 in 1999. Based upon the Debtors' review of the applicable documents, the Debtors believe that leasing is permitted without any third-party consent. The Debtors tell Judge Paine they are working with their landlords and related parties to obtain any necessary non-disturbance and attornment agreements. With respect to alterations or signage, the Debtors believe there's no complication because the Subleases provide that any alterations or signage must conform to requirements of local law, any primary lease and documents, and any alterations other than interior or non-structural alterations are subject to the Debtors' consent. The Debtors believe that the transaction represents sound exercise of business judgment, provides for adequate protection for the parties concerned and is in the best interest of the Debtors' estates. The Agreement also provides that: (1) The Subleases shall be subject and subordinate to Recorded Documents and Bed, Bath & Beyond agrees to comply with all of the Recorded Documents; (2) Bed, Bath & Beyond shall cause its work of alterations and improvements to be performed in a good and work-manlike manner, in full compliance with all applicable codes and the Recorded Documents and in accordance with plans and specifications as approved by Debtors and any other parties; (3) Bed, Bath & Beyond shall not make any alterations to the premises without the prior written consent of Debtors; (4) In addition to rental, Bed, Bath & Beyond shall pay its proportionate share of taxes, insurance, utilities, common area maintenance and operating costs of the premises; (5) In the event Bed, Bath & Beyond fails to operate a retail business for more than 180 consecutive days, the Debtors shall have the right to recapture the premises; (6) Bed, Bath & Beyond may assign or sublet the premises only upon the prior written consent of Debtors, but shall have the right to assign or sublet the premises without Debtor's prior consent to any entity that (a) is under common control with Bed, Bath & Beyond, (b) purchases all or substantially all of the assets of Bed, Bath & Beyond or 10 or more of Bed, Bath & Beyond's stores and continues to use the premises for the same purposes as under the Subleases; (7) Bed, Bath & Beyond shall have the right to terminate the Subleases in the event (a) 50% or more of the premises shall be taken by condemnation, (b) the availability parking spaces are reduced below that required by local law and (c) ingress and egress are diminished. (Service Merchandise Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) SUNTERRA CORP: PPM Ventures Submits $75M Offer for European Unit ---------------------------------------------------------------- Sunterra Corp. (STERE) has received a non-binding $75 million offer for its wholly owned, nonbankrupt Sunterra Europe (Group Holdings) PLC unit, which does business as the Grand Vacation Club in the European vacation ownership market. The offer was submitted by the venture capital investment group PPM Ventures, which submitted what Sunterra determined to be the highest and best of four non-binding letters of intent received for the unit. In connection with the offer, Sunterra, a Orlando, Fla.-based timeshare company, has sought bankruptcy court approval both to procedures through which parties can submit competing offers for the unit and ultimately, to sell the unit to the highest and best bidder. Judge James F. Schneider of the U.S. Bankruptcy Court in Baltimore has continued the hearing on the bid procedures to Oct. 26, according to Joel Sher of Shapiro Sher & Guinot, counsel for the company's official unsecured creditors' committee. (ABI, 19-Oct-00) TEU HOLDINGS: Creditors' Committee Taps Brown & Wood as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of TEU Holdings, Inc., et al. seeks court approval of its application to employ Brown & Wood as counsel, substituting for the firm of Whitman Breed Abbott & Morgan LLP due to the fact that Attorney Norman N. Kinel joined the firm of Brown & Wood LLP.. The firm will advise the Committee and represent it with respect to proposals and pleadings submitted by the debtors or others to the court or the Committee; representing the Committee with respect to any plans of reorganization or disposition of assets proposed in these cases; attending hearings, drafting pleadings and generally advocating positions which further the interests of the creditors represented by the Committee; assisting in the examination of the debtors' affairs and review of the debtors' operations; investigating any potential causes of action which the debtors or the Committee may bring against any third-party; advising the Committee as to the progress of the Chapter 11 proceedings; and performing such other professional services as are in the interests of those represented by the Committee, including, without limitation, those set forth in Bankruptcy Code Section 1103(c). The firm's hourly rates currently range from $80-$150 for paralegals, from $275 to $395 for associates, from $300 to $345 for counsel and from $400 to $600 for members. VIDEO UPDATE: Rental Chain Considers Selling Off 119 Retail Stores ------------------------------------------------------------------ The St. Paul-based video retailer which recently retained Keen Realty LLC to conduct its auction, could shut down a fifth of its 586 stores, the Tribune Business News reports. "For the most part, they are not good video store locations," said Dan Potter, Video Update's chief executive. Potter nor Keen has divulge any information on the 119 stores to be sold off. "They're still tinkering with the list," said Chris Mahoney, a Keen Realty representative, based in Great Neck, N.Y. The video retailer filed for bankruptcy protection in Delaware last month. "We will definitely come out of Chapter 11," Potter added. "My goal is to get out of it as quickly as possible." WASTE MANAGEMENT: Signs Cooperative Research & Development Pact With EPA ------------------------------------------------------------------------ Waste Management Inc. (NYSE:WMI) announced that it has signed a Cooperative Research and Development Agreement with the U.S. Environmental Protection Agency (EPA) to research and develop landfill bioreactor and biocover projects. Under the agreement, various bioreactor and biocover techniques will be studied to determine the efficiency of landfill bioreactor technology and of air emissions reduction in biological landfill covers. Phase I of the five-year agreement begins with projects at Waste Management's Outer Loop Recycling and Disposal Facility in Louisville, Ky. Waste Management expects to add more projects over the term of the agreement. "We believe there are significant environmental and economic benefits to be gained by making technical and operational changes that impact a landfill's performance," said A. Maurice Myers, chairman and CEO of Waste Management. "We see the potential to transform landfills from waste repositories to waste treatment systems." "The results of this joint research effort will give us a better understanding of landfill dynamics," said Elizabeth Cotsworth, director of the Office of Solid Waste for the EPA. "We think this project has the potential to provide data that could result in more flexibility for landfill owners and operators and better waste management practices." Bioreactor technology accelerates the biological decomposition of food, paper and other organic wastes in a landfill by significantly increasing the moisture content in a landfill. The liquids create optimum conditions for the microorganisms to rapidly degrade the solid waste. By using these techniques, airspace in a typical landfill can be increased by at least 15 to 30 percent, decreasing the need for new landfills, and the waste body can achieve environmental stability in a shorter time frame. The biocover process at Outer Loop will use composted yard wastes to cover the landfill. Organisms in the compost will then degrade the greenhouse gases associated with the degradation of municipal solid waste, therefore substantially lowering the emissions of the gases into the atmosphere. Waste Management Inc. is its industry's leading provider of comprehensive waste management services. Based in Houston, the Company serves municipal, commercial, industrial and residential customers throughout North America. WEBVAN GROUP: Online Retailer in California In a Financial Squeeze ------------------------------------------------------------------ Webvan Group Inc., the Foster City, California, on-line grocery retailer, is struggling to show a profit at a time when dotcom investors are becoming increasingly impatient with technology firms. Webvan, which since starting up four years ago has piled up losses of more than $290 million, has been trying to cut costs, recently laying off fifty employees and delaying plans to enlarge four of its distribution centers on the East Coast. The company may also resort to further layoffs as a result of its merger with HomeGrocer.com Inc. of Kirkland, Wa. Webvan does still have $550 million in cash and assets that should keep it operating through next year, but at least one industry analyst has expressed doubt that Webvan will end up the giant in the online-grocery industry. For a free copy of an article about Webvan call 800-407-9044. (New Generation Research, Inc., 19-Oct-00) * Bond pricing for the week of October 23, 2000 ---------------------------------------------- Data is supplied by DLS Capital Partners, Inc. Following are indicated prices for selected issues: AMC Ent 9 1/2 '11 42 - 44 Amresco 9 7/8 '05 50 - 53 Advantica 11 1/4 '08 54 - 56 Asia Pulp & Paper 11 3/4 '05 46 - 48 Carmike Cinema 9 3/8 '09 26 - 28 (f) Conseco 9 '06 65 - 67 Fruit of the Loom 6 1/2 '03 50 - 53 (f) Federal Mogul 7 1/2 '04 28 - 31 Genesis Health 9 3/4 '05 6 - 8 (f) Globalstar 11 1/4 '04 27 - 29 Loewen 7.20 '03 38 - 42 (f) Oakwood Homes 7 7/8 '04 35 - 38 Owens Corning 7 1/2 '05 27 - 29 (f) Paging Network 10 1/8 '07 24 - 27 (f) Pillowtex 10 '06 15 - 17 Revlon 8 5/8 '08 58 - 59 Saks 7 '04 60 - 62 Trump Atlantic 11 1/4 '06 69 - 72 TWA 11 3/8 '06 36 - 38 ********* Bond pricing, appearing in each Monday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles available from Amazon.com -- go to http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt-- or through your local bookstore. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Ronald Ladia, Zenar Andal, and Grace Samson, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *